Taiwan Semiconductor Manufacturing (NYSE:TSM) Stock Price Down 6.6% - What's Next?

Key Points

• TSMC shares fell 6.6% on Friday, trading as low as $412.79 amid heavy volume that was well above average. The stock had previously closed at $444.92.
• Despite the decline, the article highlights continued strong AI demand and comments from TSMC’s CEO that long-term growth remains robust. Wedbush responded by turning more bullish, seeing tight supply as a sign of pricing power and durable demand.
• Wall Street sentiment remains generally positive, with brokers assigning TSMC an average “Buy” rating and several firms maintaining or raising targets. The company also recently increased its quarterly dividend to $1.1136 per share, up from $0.95.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report) shares were down 6.6% on Friday . The stock traded as low as $412.79 and last traded at $415.6170. Approximately 19,080,833 shares were traded during trading, an increase of 38% from the average daily volume of 13,794,963 shares. The stock had previously closed at $444.92.

Key Stories Impacting Taiwan Semiconductor Manufacturing

Here are the key news stories impacting Taiwan Semiconductor Manufacturing this week:

• Positive Sentiment: TSMC’s CEO said AI demand remains robust and long-term growth looks strong, reinforcing the company’s role at the center of the AI supply chain. TSMC CEO Issues Stark AI Supply Warning -- Wedbush Sees Big Opportunity
• Positive Sentiment: Wedbush turned bullish on TSMC after the AI supply warning, viewing tight supply as evidence of strong pricing power and sustained demand. TSMC CEO Issues Stark AI Supply Warning -- Wedbush Sees Big Opportunity
• Positive Sentiment: Brokerage coverage remains favorable, with TSMC reportedly carrying an average “Buy” rating, which can help support investor sentiment. Taiwan Semiconductor Manufacturing Company Ltd. NYSE: TSM Given Average Rating of "Buy" by Brokerages
• Neutral Sentiment: TSMC’s annual shareholder meeting approved 2025 results and charter changes, a routine corporate update with limited immediate stock impact. TSMC Shareholders Approve 2025 Results and Charter Changes at June 4 Meeting
• Negative Sentiment: CEO comments that TSMC still cannot fully satisfy customer demand, especially for AI chips, raised concerns about supply bottlenecks and execution challenges. TSMC Stock Price Drops as CEO Warns Chip Supply Struggles to Meet AI Demand
• Negative Sentiment: Reports that the AI chip shortage may last for years likely added to worries that supply constraints and rising costs could weigh on near-term margins. Taiwan Semiconductor (TSM) Stock Drops as CEO Projects Years-Long AI Chip Supply Shortage

Wall Street Analyst Weigh In

Several research firms have commented on TSM. Barclays raised their target price on shares of Taiwan Semiconductor Manufacturing from $450.00 to $470.00 and gave the company an "overweight" rating in a report on Wednesday, April 22nd. Weiss Ratings upgraded shares of Taiwan Semiconductor Manufacturing from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Friday, March 20th. Wedbush reissued an "outperform" rating on shares of Taiwan Semiconductor Manufacturing in a research note on Wednesday, February 11th. DA Davidson restated a "buy" rating and set a $450.00 target price on shares of Taiwan Semiconductor Manufacturing in a research note on Friday, April 17th. Finally, Zacks Research downgraded Taiwan Semiconductor Manufacturing from a "strong-buy" rating to a "hold" rating in a report on Monday, March 16th. Two analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and two have given a Hold rating to the company's stock. According to data from MarketBeat, Taiwan Semiconductor Manufacturing currently has an average rating of "Buy" and an average target price of $404.29.

Taiwan Semiconductor Manufacturing Stock Performance

The company has a debt-to-equity ratio of 0.16, a quick ratio of 2.31 and a current ratio of 2.49. The firm has a market cap of $2.16 trillion, a P/E ratio of 34.58, a P/E/G ratio of 1.27 and a beta of 1.38. The company's 50 day moving average is $386.53 and its 200 day moving average is $347.24.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) last posted its earnings results on Tuesday, February 10th. The semiconductor company reported $3.11 earnings per share for the quarter. Taiwan Semiconductor Manufacturing had a net margin of 46.97% and a return on equity of 36.81%. The firm had revenue of $30.65 billion for the quarter. As a group, equities analysts predict that Taiwan Semiconductor Manufacturing Company Ltd. will post 15.28 earnings per share for the current fiscal year.

Taiwan Semiconductor Manufacturing Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, October 8th. Shareholders of record on Wednesday, September 16th will be issued a $1.1136 dividend. This represents a $4.45 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date of this dividend is Wednesday, September 16th. This is a boost from Taiwan Semiconductor Manufacturing's previous quarterly dividend of $0.95. Taiwan Semiconductor Manufacturing's payout ratio is currently 25.04%.

Insider Activity

In other news, VP Tzu-Sou Chuang sold 200,000 shares of the company's stock in a transaction that occurred on Tuesday, May 19th. The stock was sold at an average price of $69.83, for a total value of $13,966,000.00. Following the completion of the transaction, the vice president owned 2,495,165 shares of the company's stock, valued at $174,237,371.95. This represents a 7.42% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Also, VP Bor-Zen Tien acquired 2,000 shares of the stock in a transaction dated Tuesday, May 19th. The stock was purchased at an average cost of $69.91 per share, with a total value of $139,820.00. Following the purchase, the vice president directly owned 11,051 shares of the company's stock, valued at $772,575.41. This trade represents a 22.10% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders acquired 3,346 shares of company stock valued at $218,005 over the last quarter. Corporate insiders own 1.11% of the company's stock.

Institutional Investors Weigh In On Taiwan Semiconductor Manufacturing

Institutional investors have recently added to or reduced their stakes in the business. Fisher Asset Management LLC lifted its holdings in Taiwan Semiconductor Manufacturing by 1.8% during the 4th quarter. Fisher Asset Management LLC now owns 18,146,900 shares of the semiconductor company's stock worth $5,514,662,000 after buying an additional 313,773 shares during the period. Van ECK Associates Corp raised its position in shares of Taiwan Semiconductor Manufacturing by 11.1% during the fourth quarter. Van ECK Associates Corp now owns 17,464,962 shares of the semiconductor company's stock worth $5,307,428,000 after acquiring an additional 1,750,824 shares during the last quarter. Bank of America Corp DE raised its position in shares of Taiwan Semiconductor Manufacturing by 6.5% during the fourth quarter. Bank of America Corp DE now owns 15,902,819 shares of the semiconductor company's stock worth $4,832,708,000 after acquiring an additional 966,926 shares during the last quarter. Jennison Associates LLC raised its position in shares of Taiwan Semiconductor Manufacturing by 6.4% during the fourth quarter. Jennison Associates LLC now owns 13,394,299 shares of the semiconductor company's stock worth $4,070,393,000 after acquiring an additional 802,757 shares during the last quarter. Finally, Alliancebernstein L.P. lifted its stake in shares of Taiwan Semiconductor Manufacturing by 2.2% in the third quarter. Alliancebernstein L.P. now owns 10,687,037 shares of the semiconductor company's stock worth $2,984,783,000 after acquiring an additional 229,237 shares during the period. 16.51% of the stock is owned by institutional investors.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company (TSMC) is a leading pure-play semiconductor foundry that provides wafer fabrication and related services to the global semiconductor industry. Founded in 1987 by Morris Chang and headquartered in Hsinchu, Taiwan, TSMC manufactures integrated circuits on behalf of fabless and integrated device manufacturers, offering contract chip production across a broad set of technologies and products.

TSMC's service offering covers logic and mixed-signal process technologies, specialty processes for radio-frequency, power management and embedded memory, and advanced nodes used in mobile, high-performance computing and AI applications.

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